The Pudgy Penguins non-fungible token (NFT) project is under new leadership after the close of a long-awaited 750 ETH ($2.5 million) sale.
A group led by Pudgy Penguins holder and Los Angeles-based entrepreneur Luca Netz, will buy control of the project, along with royalties, from the original four co-founders of the project, according to people involved with the deal. Netz will be the new leader of “The Huddle,” along with his collaborator Cameron Moulène and several other stakeholders.
Control of the project will allow the buyers’ group to launch a token and conduct airdrops to other holders of the NFT series, as well as other rights.
The deal comes as the Pudgy Penguins community ousted their founding team in a contentious Discord vote in January. Since then, holders of the cute flightless digital birds have been waiting for word on the project’s uncertain future.
“This deal’s taken way longer than I thought,” said Netz, who last spoke with CoinDesk in January, when a preliminary deal was struck between Netz and the prior founding team.
On Friday, Pudgy Penguin trading spiked on NFT marketplace OpenSea as deal closing rumors swirled. The floor price of a Pudgy Penguin jumped as high as 2.5 ETH after trading bounced between 0.7 and 1.4 ETH the past few weeks. As of press time, the cheapest penguin on offer was listed at 2.2 ETH.
Netz planned to officially announce the close of the sale on social media late Saturday, and added that the deal was “100% not an April Fool’s joke” in an interview with CoinDesk on Friday; hence his decision to wait until after April 1 to go public.
“Everything is aligned to make this one of the most prevalent projects of all time,” said Netz, who declined to comment on specific roadmap items, but hinted at at least one retail partnership.
Launched in July 2021, the Pudgy Penguins has become one of the most popular NFT collections, with over 49,000 ether in trading volume (about $171 million in today’s ether prices) on the NFT marketplace OpenSea.
It was featured in a New York Times column last summer detailing the NFT phenomenon, and currently touts celebrities such as NBA All-Star Steph Curry and rapper Tory Lanez among its holders.
“Penguins were my first NFT purchase,” Netz told CoinDesk. He says he was drawn to the collection because the digital penguins – donning accessories from wizard hats to bowties – “emit joy.” Netz purchased his first penguin for about 0.1 ETH last summer.
“It’s an interesting emotion to feel when looking at an NFT project,” said Netz. “The collections that evoke emotion are the most powerful.”
“They were so darn cute and everyone loved them,” said Twitter user JoeyMooose of the project’s initial reception. JoeyMooose owns a Pudgy Penguin sporting a green mohawk and coined the collection’s popular rallying cry, “I am my penguin and my penguin is me” during an emotional Pudgy Penguins Twitter Spaces event.
Netz, who built a successful drop-shipping business before dabbling in NFTs, says he will head up the project’s marketing efforts and turn the Pudgy Penguins into “a brand that’s known both in and outside of the NFT world.”
When asked about a possible Pudgy Penguin toy, Netz responded, “It would be fiscally irresponsible if I didn’t do that.”
Wen $PENGU Token?
Rumors circulated Friday that the long-awaited Pudgy Penguins token would be announced, further fueling the penguin buying frenzy.
“Speculation is beginning to emerge around NFT floors when there’s the expectation of tokenization, even if it’s often just rumors,” said Twitter user GiganticRebirth, an influential member of the Pudgy Penguins community who holds the rare Ghost Penguin. “With tokenization, it strengthens the thesis that NFTs will serve as yield-bearing assets.”
Such a move would follow in the footsteps of Yuga Labs’ Bored Ape Yacht Club, which launched its ApeCoin ($APE) token earlier this month.
Netz denied the rumors but promised a token that “respected the law” would eventually come.
“If [Bored Ape Yacht Club] did it, we will do it,” Netz told CoinDesk on Friday. “But it’s not something I want to tackle now.”
Pudgy Penguin holders, who collectively refer to themselves as “The Huddle” and “Pengus,” have faced a tumultuous couple of months after their initial slingshot to fame.
With several “accidental” de-listings on OpenSea and declining sales so far this year, the desire for competent leadership has been long-awaited.
According to multiple sources, the original Pudgy Penguins founding team made lofty promises to the community, including launching a children’s book, a token and a metaverse game centered around the penguin images. Ultimately, none of the projects came to fruition.
Pudgy Penguins co-founder Cole Thereum did not respond to repeated requests for comment via Twitter message.
Meanwhile, other profile picture projects such as Bored Ape Yacht Club and Cool Cats have seen their prices surge last fall, leaving many holders of the Pudgy Penguins NFTs disappointed.
Tensions came to a head last Christmas Day, when a hotly anticipated airdrop revealed NFTs of fishing-rods, which were initially misspelled as “rogs.”
“That was the rod that broke the camel’s back,” said Twitter user ActuallyAgents, a Pudgy Penguins community manager, who added that many penguin-holders anticipated a game at the time. “Imagine if you were a kid waking up on Christmas and your grandma got you a PlayStation2 game, but you didn’t own a PlayStation2.”
In January, the pseudonymous Twitter user 9x9x9 (and holder of the rare Banana Penguin) dropped a thread alleging the Pudgy Penguin founders drained the project’s treasury of funds and offered to sell the project’s shell to him for 888 ETH.
The revelations sparked an uproar in the Pengu community, which culminated in the fateful Discord vote ousting the founders. The floor price of a Pudgy Penguin fell to a low of 0.5 ETH.
Barbarians at the igloo
The vote marked the project’s subsequent descent into chaos, as competing bids, a white knight offer and a grassroots effort to fork the community all played out on social media.
A bidding war broke out over the project in early January, with Luca Netz offering 750 ETH to purchase the penguins. Other public competing offers came from Mintable founder Zach Burks and NFT influencer BeanieMaxi.
The pseudonymous trader GiganticRebirth offered a matching 750 ETH to Thereum and the founders to “wait for a more suitable buyer,” a suggestion that went unheeded.
Another pseudonymous trader, Twitter user Vincent Van Dough, who heads up the Three Arrows Capital offshoot Starry Night Capital, announced he would be “wrapping” his 50+ penguins in an effort to cut off royalty payments to the original founders and jumpstart the formation of a community-owned decentralized autonomous organization (DAO).
“Wrapping” refers to a smart contract that takes an asset and issues a parallel asset. Wrapping, the thinking goes, would allow a penguin-holder to maintain the aesthetics of their NFT but sever relations with the original Pudgy Penguins ERC-721 contract. Wrapped penguins can also be converted back to the original at any time.
“We saw this as a perfect opportunity to build a tool that would give the community some leverage,” said Metadrop co-founder Psyopcop during a Discord call with CoinDesk. Metadrop is a NFT platform that released the code for the wrapper.
Even for penguin holders that chose not to opt into the wrapper, the threat itself turned the smart contract into a game of nuclear politics. “They like having it as an option,” said Metadrop’s loomdart. “Just having it gives the community leverage.”
As of Saturday afternoon, data from Nansen showed a supply of 560 wrapped penguins, or approximately 6% of the total project.
“I think wrapped Penguins is a really interesting experiment that allows community members to opt out of the status quo,” said Alex Svanevik, CEO of Nansen, who is himself a Pudgy Penguin holder. “You could argue it’s a community fork of the original NFT collection.”
Adding to the drama, Van Dough also challenged Mintable’s Burks to make a “legit offer” on his rare shark penguin, saying he would get out of the way and cease the “wrapping” efforts.
“The vibes are just terrible right now,” said JoeyMooose at the time. “It hurts that people are playing this like a game of chess.”
“Too much drama, I can’t keep up,” echoed 9x9x9.
Often, holders of rare (and expensive) penguins in the collection exercise outsized influence within the community.
Rare penguins (clockwise, from top): 9x9x9’s Banana Penguin (purchased for 100 ETH); Vincent Van Dough’s Shark Penguin (purchased for 69 ETH); GiganticRebirth’s Ghost Penguin (purchased for 100 ETH). (Images from OpenSea)
The “Huddle” moves forward
Now, the Pudgy Penguins are looking to start a new chapter as the Netz leadership team takes over.
“I’m extremely optimistic and confident in Luca and the team he’s assembled,” Twitter user ActuallyAgents, who will remain in a leadership position under the new regime, told CoinDesk.
“Aside from their great business track record, the philosophy of compassion and inclusivity he wants to bring to the penguins is something the space really needs.”